India tycoon Mukesh Ambani and KKR & Co. are in advanced discussions for a $1 billion capital infusion by the American international investment group.
The partnership is another U.S. investment in the India billionaire's unit Reliance Retail Ventures after it finalized a $1 billion deal with California-based private equity company Silver Lake, sources with information of the transaction said.
The U.S. private equity group is aiming for ownership of Reliance Retail Ventures Ltd., a division of the biggest retail group in India, the sources said. KKR is looking to spend at least $1.5 billion and the deal could be made public this month, reports said.
KKR recently gave the nod to dispose of its business software company Epicor Software to Clayton Dubilier & Rice for $4.7 billion. In a separate proposition, another private equity group - L Catterton - is also looking at pouring hundreds of millions of dollars into Ambani's Reliance Retail, sources said. Talks are continuing but might be stalled or scrapped, the sources said.
Reliance Retail Ventures is also set to attract $5 billion from the Abu Dhabi Investment Authority and Mubadala Investment Co., reports said. The latest funding is seen to provide parent Reliance Industries additional muscle to take on powerhouse competitors like Amazon and Walmart-operated Flipkart for dominance in the India retail landscape.
Meanwhile, after KKR's financial results for the second quarter, Citigroup market strategist William Katz increased his price target for the company's stock from $40 to $47.50 and kept a "buy" rating - calling KKR's earnings "increasingly favorable."
In other developments, KKR-owned Academy Sports and Outdoors, Inc. filed for an initial public offering in the U.S. Wednesday - making the sport business the newest group to take advantage of the recovery in capital markets. Academy Sports has 259 shops across the U.S. that sell athletic gear including shoes, apparel and outdoor equipment such as bicycles and tents.
